DCIT CEN CIR 36, MUMBAI v. MUKESH J SOMAIYA, MUMBAI

ITA 8074/MUM/2011 | 2009-2010
Pronouncement Date: 21-11-2014 | Result: Dismissed

Appeal Details

RSA Number 807419914 RSA 2011
Assessee PAN ABBPS4110R
Bench Mumbai
Appeal Number ITA 8074/MUM/2011
Duration Of Justice 2 year(s) 11 month(s) 20 day(s)
Appellant DCIT CEN CIR 36, MUMBAI
Respondent MUKESH J SOMAIYA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 21-11-2014
Date Of Final Hearing 11-09-2014
Next Hearing Date 11-09-2014
Assessment Year 2009-2010
Appeal Filed On 01-12-2011
Judgment Text
B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH MUMBAI BEFORE S HRI R.C. SHARMA A CCOUNTANT MEMBER & SHRI AMIT SHUKLA J UDICIAL MEMBER I.T.A. NO. 8074 /MUM/20 1 1 ( ASSES SMENT YEAR : 20 0 9 - 20 10 THE ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 36 ROOM NO. 11 AAYAKAR BHAVAN CHURCHGATE M UMBAI 400 0 2 0 . VS. SHRI MUKESH J. SOMAIYA 6/BPS PLAZA DEVIDAYAL ROAD MULUND (W) MUMBAI 400 0 8 0 . PAN : ABBPS4110R ( APPELLANT ) .. ( RESPONDENT ) A PPELLANT BY SHRI PREETAM SINGH R E SPONDENT BY : SHRI VIJAY MEHTA DATE OF HEARING : 1 1 - 09 - 2014 / DATE OF PRONOUNCEMENT : 21 - 11 - 2014 [ O R D E R PER R.C. SHARMA A .M . : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) - 41 MUMBAI DATED 20 - 09 - 2011 FOR THE A.Y. 20 09 - 10 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT 1961. 2. IN GROUND NO. 1 THE REVENUE IS AGGRIEVED BY THE DIRECTION ISSUED BY THE LD. CIT(A) FOR RECOMPUTING THE INTEREST CHARGED U/S 234B AND 2 34C OF THE INCOME TAX ACT 1961 AFTER ADJUSTING THE CASH SEIZED DURING COURSE OF SEARCH AGAINST THE TAX LIABILITY. I TA 8074 / M/ 1 1 2 3. FACTS IN BRIEF ARE THAT DURING THE COURSE OF SEARCH THE ASSESSEE HAS ASKED FOR ADJUSTMENT OF CASH OF RS. 14 LACS SEIZED DURING THE COURSE OF SEARCH AGAINST THE ADVANCE TA X LIABILITY. HOWEVER THE A.O. HAS NOT MADE THE ADJUSTMENT AND CHARGED INTEREST U/S 234B & 234C OF THE ACT. THE LD. CIT(A) BY HIS IMPUGNED ORDER DIRECTED THE A.O. TO ALLOW CREDIT OF RS. 14 LACS AGAINST THE ADVANCE TAX LIABILITY OF THE ASSESSEE AND RECOMPU TE THE INTEREST U/S 234B AND 234C OF THE ACT AFTER HAVING MADE THE FOLLOWING OBSERVATION: - IN THIS GROUND THE APPELLANT HAS CLAIMED THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION A CASH OF RS. 14 00 000/ - WAS SEIZED. THE APPELLANT VIDE LETTER DATED 31 - 03 - 2009 HAS REQUESTED THE DY. DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT IX(2) TO ADJUST THE SEIZED CASH AGAINST THE ADVANCE TAX LIABILITY OF THE ASSESSEE AND ALSO REQUESTED THE DCIT CENTRAL CIRCLE 36 MUMBAI VIDE LETTER DTD. 23 - 12 - 2010. BUT T HE A.O. HAS NOT MADE THE ADJUSTMENT AND CHARGED INTEREST U/S 234B & 234C. NOW THE APPELLANT HAS RAISED THIS GROUND THAT WHEN THE SEIZED CASH OF RS. 14 00 000/ - WAS LYING WITH THE DEPARTMENT AND THE ASSESSEE HAS REQUESTED THAT OIT MAY BE ADJUSTED AGAINST T HE ADVANCE TAX LIABILITY WHICH WAS NOT DONE BY THE A.O. THEREFORE INTEREST U/S 234B & 234C IS NOT LEVIABLE ON THIS AMOUNT. TO STRENGTHEN THIS VIEW THE APPELLANT HAS ALSO RELIED ON THE DECISION OF HONBLE MUMBAI TRIBUNAL IN THE CASE OF SUDHAKAR M. SHETT Y VS. ACIT NITIN M. JADIA VS. ACIT SATYA PRAKASH SHARMA V. ACIT (SUPRA) AND ALSO THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PANDURANG DAYARAM TALMALE IT APPEAL NO. 26 OF 2001 DATED 13.2.2003. FROM THE FACTS OF THE CASE IT IS OBSER VED THAT THE DECISION OF THE HON'BLE BOMBAY HIGH COURT AND THE TRIBUNAL ARE APPLICABLE TO THE PRESENT CASE WHERE IT IS HELD THAT THE ASSESSEE HAS REQUESTED THE DEPARTMENT TO ADJUST THE CASH WHICH WAS SEIZED DURING THE SEARCH AGAINST THE TAX LIABILITY THE DEPARTMENT HAS TO ADJUST THE SEIZED AMOUNT TOWARDS THE ADVANCE TAX FROM THE DATE WHEN IT WAS SEIZED. KEEPING IN VIEW THE FACTS AND C IRCUMSTANCES THE A.O. IS DIRECTED TO ALLOW THE CREDIT OF RS.14 00 000/ - AGAINST THE ADVANCE TAX LIABILITY OF THE ASSESSEE F ROM THE DATE OF LETTER DATED 23.12.2010 WHEN HE WAS REQUESTED FOR ADJUSTMENT OF THE SEIZED CASH AGAINST THE ADVANCE TAX LIABILITY AND RE - COMPUTE THE I NTEREST U/S. 234B & 234C ACCORDINGLY. THUS THE GROUN D OF APPEAL IS P ARTLY ALLOWED . 4. WE HAVE CONSIDE RED THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN GIVING I TA 8074 / M/ 1 1 3 DIRECTION TO THE A.O. FOR ADJUSTMENT OF SEIZED CASH AGAINST THE ADVANCE TAX LIABILITY BY FOLLOWING THE DECISION OF HONBLE JURISDICTION AL HIGH COURT IN THE CASE OF CIT VS. PANDURANG DAYARAM TALMALE (IT APPEAL NO. 26 OF 2001 DATED 13 - 2 - 2003). WE ACCORDINGLY DISMISS THIS GROUND RAISED BY THE REVENUE. 5. THE NEXT GRIEVANCE OF THE REVENUE RELATE S TO ALLOWING TELESCOPING OF EXPENDITURE INC URRED ON RENOVATION AND ADVANCES GIVEN TO FRIENDS OUT OF INCOME ADDED UNDER THE HEAD INCOME FROM BETTING IN IPL CRICKET MATCH. THE LD. CIT(A) BY HIS IMPUGNED ORDER ALLOWED THE TELESCOPIC EXPENDITURE BY OBSERVING AS UNDER: - I HAVE CONSIDERED THE SUBMISSI ONS OF THE APPELLANT ORDER OF THE A.O. AND FACTS OF THE CASE CAREFULLY. I T IS NOTICED THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION A NOTEBOOK WAS FOUND AND SEIZED CONTAINING 1 TO 99 PAGES. IN THIS NOTEBOOK ENTRIES RELATING TO BETTING IN THE IPL CRICKET MATCH OF MAY 2008 WAS NOTED. ACCORDINGLY STATEMENT OF THE ASSESSEE WAS RECORDED DURING THE COURSE OF SEARCH AND EVEN IN THE ASSESSMENT PROCEEDINGS ON THESE ENTRIES. THE APPELLANT HAS SUBMITTED THAT THESE ENTRIES WERE NOT BELONGING TO HIM A S THESE WERE NOT WRITTEN IN HIS HANDWRITING. IT WAS FURTHER ARGUED THAT AN AMOUNT OF RS.1 51 08 000/ - DECLARED DURING THE COURSE OF SEARCH ON ACCOUNT OF UNACCOUNTED INVESTMENT IN THE RENOVATION AND LOANS GIVEN TO DIFFERENT PERSONS WAS THE SAME INCOME WHICH WAS EARNED THROUGH BETTING IN THE IPL CRICKET MATCH AND NO SEPARATE ADDITION IS TO BE MADE ON THIS ACCOUNT. BUT THE A.O. HAS NOT ACCEPTED THE ARGUMENTS OF THE APPELLANT AND MADE THE ADDITION OF RS.65 51 550/ - ON THE BASIS OF ENTRIES IN THE NOTEBOOK. BEFO RE ME THE APPELLANT HAS SUBMITTED THAT THE ENTRIES OF RS.65 51 550/ - MADE IN THE NOTEBOOK ARE RELATING TO THE BETTING OF IPL CRICKET MATCH. IT WAS ALSO AGREED THAT THIS NOTEBOOK WAS FOUND AND SEIZED FROM HIS BEDROOM. FURTHER IT WAS ALSO ADMITTED THAT MOR E THAN 50% OF THE NOTING IN THE NOTEBOOK WERE IN THE HANDWRITING OF HIS SON BUT THE APPELLANT HAS DENIED TO OWN THE ENTRIES RELATING TO BETTING OF CRICKET MATCH WRITTEN IN THIS NOTEBOOK. BUT TO AVOID LITIGATION AND FOR PEACE OF MIND THE APPELLANT HAS DE CLARED RS.1 51 08 000/ - INVESTED IN THE RENOVATION OF HOUSE AND CASH LOANS GIVEN TO FRIENDS. ON THIS BASIS THE AR OF THE APPELLANT HAS ARGUED THAT THE ENTRIES IN THE NOTEBOOK ARE ONLY OF RS.65 51 550/ - AND THE ASSESSEE HAS ALREADY DECLARED R S.1 51 08 000/ - WHICH IS MUCH MORE THAN THE ENTRIES REFLECTED IN THE SEIZED NOTEBOOK. THEREFORE NO SEPARATE ADDITION IS TO BE MADE ON THE BASIS OF THESE ENTRIES. I HAVE PERUSED THE CONTENTS OF THE SEIZED NOTEBOOK AND THE STATEMENT I TA 8074 / M/ 1 1 4 RECORDED DURING THE COURSE OF SEARCH A ND DURING THE ASSESSMENT PROCEEDINGS RECORDED BY THE AO. IT IS OBSERVED THAT THE ENTRIES MADE IN THE NOTEBOOK ARE RELATING TO BETTING OF CRICKET MATCH WHICH IS AN UNDI S PUTED FACT. SECONDLY THIS NOTEBOOK FOUND AND SEIZED FROM THE BEDROOM OF THE ASSESSEE IS ALSO UNDISPUTED. AS PER THE PROVISIONS OF SECTION 132(4) AND PROVISIONS OF SECTION 292C IT IS CLEAR THAT THE ENTRIES MADE IN THE DOCUMENTS FOUND AND SEIZED FROM A PERSON ARE TO BE TREATED AS BELONGING TO HIM. SINCE THE NOTEBOOK WAS FOUND AND SEIZED FROM T HE BEDROOM OF THE ASSESSEE THEREFORE IT IS HELD THAT THE CONTENTS OF THIS NOTEBOOK IS ALSO BELONGING TO HIM. NOW THE SECOND ISSUE RELATING TO ENTRIES OF RS.65 51 550/ MADE ON ACCOUNT OF BETTING OF THE CRICKET MATCH IS ALSO UNDISPUTED. BUT THE QUESTION ARISES WHETHER THIS INCOME WILL BE TREATED AS OVER AND ABOVE THE DISCLOSURE MADE BY THE ASSESSEE DURING THE COURSE OF SEARCH AMOUNTING TO RS.1 51 08 000/ - . THIS AMOUNT WAS DISCLOSED BY THE APPELLANT ON ACCOUNT OF INVESTMENT MADE IN THE RENOVATION AND LOANS GIVEN TO FRIENDS. THE APPELLANT HAS ALSO ARGUED THAT THE INCOME EARNED FROM UNDISCLOSED SOURCES WAS INVESTED IN THE RENOVATION AND LOANS WHICH ALSO INCLUDE THE INCOME EARNED OF RS. 65 51 550/ - RELATING TO BETTING OF THE CRICKET MATCH. IN VIEW OF THESE FA CTS IT IS CLEAR THAT THE INCOME EARNED BY THE ASSESSEE FROM THE BETTING OF CRICKET MATCH OF RS.65 51 550/ - AND FROM OTHER UNDISCLOSED SOURCES HE HAS INVESTED IN THE RENOVATION AND CASH LOANS GIVEN TO FRIENDS. NOW THE ASSESSEE HAS DECLARED RS.1 51 08 000/ - ON ACCOUNT OF UNACCOUNTED INVESTMENT. IT IS THE SAME MONEY WHICH HE HAS EARNED FROM UNDISCLOSED SOURCES BASED ON THE ENTRIES OF THE NOTEBOOK AND FROM OTHER SOURCES NOT DECLARED IN HIS ACCOUNTS. IF THE ADDITION OF RS.65 51 550/ - IS MADE ON THE BASIS OF TH ESE ENTRIES IT WILL BE DOUBLE TAXATION OF THE SAME AMOUNT AS THE ASSESSEE HAS ALREADY DECLARED MORE THAN THE ENTRIES RECORDED IN THE NOTEBOOK. IN VIEW OF THESE FACTS AND CIRCUMSTANCES I AM OF THE VIEW THAT NO SEPARATE ADDITION IS CALLED FOR RS.65 51 550/ - BECAUSE THE INCOME EARNED FROM BETTING IN THE CRICKET MATCH WAS COVERED BY THE DISCLOSURE MADE DURING SEARCH THEREFORE THE ADDITION MADE BY THE AO IS DELETED AND THE GROUND OF APPEAL IS ALLOWED. . 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT DURING THE COURSE OF SEARCH THE A.O. MADE ADDITION IN RESPECT OF SEIZED NAVNEET NOTE BOOK MARKED AS ANNEXURE A - 2 . WITH RESPECT TO THIS DIARY THE ASSESSEE HAD DECLARED A SUM OF RS. 1 51 08 000/ - . THE A.O. HAS ALSO MADE ADDITION ON ACCOUNT OF UNACCOUN TED INVESTMENT ON HOUSE RENOVATION AND CASH LOAN TO FRIENDS AMOUNTING TO RS. 65 51 550/ - BY RECORDING A FINDING THAT THE INCOME EARNED BY THE ASSESSEE FROM BETTING OF CRICKET MATCH WAS INVESTED IN I TA 8074 / M/ 1 1 5 RENOVATION AND CASH LOANS GIVEN TO THE FRIENDS. THE SEARCH WAS HELD ON 7 - 1 - 2009. THUS THE INCOME DECLARED ON THE DATE OF SEARCH WAS ALREADY EARNED BY THE ASSESSEE THEREFORE THERE IS NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) FOR ALLOWING THE TELESCOPIC OF EXPENDITURE ALLEGED TO BE INCURRED ON RENOVAT ION OF HOUSE AND CASH LOAN TO FRIENDS. THE DETAIL ED FINDINGS GIVEN BY THE LD. CIT(A) AT PAGE 5 TO 7 HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT BY BRINGING ANY POSITIVE MATERIAL. ACCORDINGLY WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) AND UPHOLDING THE SAME WE DISMISS T HIS APPEAL FILED BY THE REVENUE . 7. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 21 ST NOVEMBER 2014. 21/11/2014 SD/ - SD/ - ( AMIT SHUKLA ) ( R.C. SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 21 /11/2014 RK SR. PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) 41 MUMBAI 4. / CIT CENTRAL III MUMBAI 5. / DR ITAT MUMBA I B BENCH 6. GUARD FILE . / BY ORDER //TRUE COPY// ( DY./ASSTT. REGISTRAR) / ITAT MUMBAI